<PAGE>
                                                                    EXHIBIT 10.2

                               SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT (this "Agreement"), dated as of this 31st day
of October, 2001, between EDWIN R. MELLETT, an individual resident of the State
of Florida, with his residence at ___________________________________________
("Mellett"), and AHL SERVICES, INC., a Georgia corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS, Mellett has been employed by the Company pursuant to an
Employment Agreement between Mellett and the Company dated as of January 1, 2001
(the "Employment Agreement");

         WHEREAS, Mellett has since the date of the Employment Agreement served
as an employee and officer of the Company and has served on the Board of
Directors of the Company; and

         WHEREAS, Mellett desires to retire and resign from his employment by
the Company and his position as a director and officer of the Company, and the
Company agrees to accept such retirement and resignation; and

         NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

                           Section 1  Termination of Employment.

                  Mellett and the Company agree that, as of October 31, 2001
(the "Termination Date"), Mellett shall cease to be an employee, officer and
director of the Company and any of its subsidiaries and affiliates. From and
after the Termination Date, Mellett shall cease to have any obligations or
duties under the Employment Agreement (other than pursuant to Section 5 thereof,
as modified in Section 5 hereof). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Employment
Agreement.

                           Section 2  Payments and Other Benefits for Mellett.

                  (a)      Severance Payment. In consideration of the promises
and agreements contained herein, and subject to the terms of this Agreement,
Mellett and the Company agree that the Company will pay to Mellett the sum of
Eight Hundred Five Thousand Three Hundred Fifty Dollars ($805,350) on January 2,
2002 (the "Severance Payment") (less all applicable taxes and F.I.C.A.
withholding and deductions). Mellett hereby acknowledges and agrees that the
Severance Payment exceeds those amounts to which he would otherwise be entitled
upon his voluntary resignation under the Employment Agreement. The parties agree
that the Severance Payment includes compensation in lieu of the 90-day notice
period set forth in the
<PAGE>

Employment Agreement and also includes any and all accrued but unused vacation
earned by Mellett prior to the Termination Date.

                  (b)      Compensation. As of the Termination Date and
notwithstanding anything to the contrary contained in the Employment Agreement,
Mellett shall have no rights to any additional payments or compensation under
the Employment Agreement except that:

                                    (i)      Mellett shall be entitled to
                                             receive the Salary otherwise
                                             payable to him under the Employment
                                             Agreement through and including the
                                             Termination Date;

                                    (ii)     Mellett shall not be entitled to
                                             any Bonus with respect to calendar
                                             year 2001;

                                    (iii)    Mellett shall be entitled to
                                             receive the car allowance provided
                                             for in the Employment Agreement
                                             through and including the
                                             Termination Date; and

                                    (iv)     Mellett shall be entitled to
                                             reimbursement of reasonable and
                                             necessary expenses incurred by him
                                             on or prior to the Termination Date
                                             at the request of and on behalf of
                                             the Company.

                  (c)      Benefit Plans. Mellett shall be entitled to
participate in the Company's medical, dental, hospitalization and life insurance
plans until December 31, 2003, and the Company shall pay all premiums for such
participation on the same basis as if Mellett was an employee of the Company
through such date. Other than as provided in this Section 2(c), Mellett shall
have no rights to participate in any benefit plans of the Company after the
Termination Date. It is understood that the coverage provided in this Section
2(c) shall be deemed to satisfy in full all of Mellett's rights under the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (COBRA).

                           Section 3  Loan to Mellett.

         Subject to the terms and conditions of this Agreement, on the later of
the Termination Date or the expiration of the recision period described in
Section 6(f) hereof, the Company shall loan Five Hundred Sixty-Six Thousand
Dollars ($566,000) to Mellett, and Mellett shall borrow such sum from the
Company (the "Loan"). On or prior to January 2, 2002, Mellett shall repay the
Loan in full. To the extent not otherwise repaid by Mellett on January 2, 2002,
the Company shall be authorized to apply the Severence Payment toward the
payment of the Loan. To the extent that the Severance Payment has not been paid
to Mellett on January 2, 2002, Mellett shall be authorized to pay the Loan by
offsetting any unpaid Severance Payment against the Loan.


                                      -2-
<PAGE>

                           Section 4  Stock Options.

                  (a)      As of the day immediately prior to the Termination
Date, Mellett had been granted by the Company a total of 1,085,000 options to
purchase shares of common stock of the Company. As of the Termination Date, the
following stock options, totaling 625,000 options, shall be relinquished:

<TABLE>
<CAPTION>
                                                                   EXERCISE PRICE
        DATE OF GRANT                NUMBER OF SHARES                 PER SHARE                 EXPIRATION DATE
       <S>                          <C>                           <C>                          <C>
       October 31, 1997                   150,000                      $17.875                 October 31, 2007

       October 9, 1998                    100,000                       21.75                   October 9, 2008

       October 9, 1998                    200,000                       21.75                   October 9, 2008

         May 14, 1999                     150,000                      25.375                    May 14, 2009

       October 28, 1999                   25,000                       20.6875                 October 28, 2009
</TABLE>

                  (b)      The following stock options, totaling 460,000 options
(the "Surviving Options"), shall continue to vest in accordance with their
respective scheduled vesting dates through December 31, 2003 as if Mellett were
employed by the Company through such date:

<TABLE>
<CAPTION>
                                                                   EXERCISE PRICE
        DATE OF GRANT                NUMBER OF SHARES                 PER SHARE                 EXPIRATION DATE
      <S>                            <C>                           <C>                         <C>
       October 15, 1996                   107,500                      $ 4.64                  October 15, 2006

       December 1, 1996                   215,000                       10.00                  December 1, 2006

      February 28, 1997                    7,500                        10.00                  February 28, 2007

         May 9, 2000                      35,000                       8.8125                     May 9, 2010

        July 11, 2000                     25,000                        6.875                    July 11, 2010

         May 10, 2001                     70,000                        7.91                     May 10, 2011
</TABLE>

The Surviving Options that have not vested as of December 31, 2003 shall expire
on such date.1 The Surviving Options shall be exercisable through December 31,
2004 and after such date all unexercised Surviving Options will expire.

---------------
         1 As of December 31, 2003, 8,750 of the options granted on May 9, 2000,
6,250 of the options granted on July 11, 2000, and 35,000 of the options granted
on May 10, 2001 will not have vested. The remaining 410,000 of the Surviving
Options will have vested.


                                      -3-
<PAGE>

                  (c)      Except to the extent inconsistent with the terms and
provisions of this Section 4, the terms and provisions of Section 4 of the
Employment Agreement and the terms and provisions of AHL Services Inc. 1997
Stock Incentive Plan (the "Plan") (including, without limitation, any provisions
governing the acceleration of the vesting of options) shall continue to govern
the Surviving Options. The Company agrees that, if the Board of Directors elects
under the Plan to accelerate the vesting of any "Options" (as defined in the
Plan) upon a "Change of Control" (as defined in the Plan) or otherwise to
accelerate the vesting of "Options" pursuant to Section 14 (or any successor
provision) under the Plan, then all Surviving Options shall also immediately
become vested (it being understood, however, that the acceleration of "Options"
held by other parties by virtue of contractual provisions specific to those
parties shall not be deemed an election by the Board to accelerate "Options" for
the purposes of this Agreement).

                           Section 5  Non-Competition, Trade Secrets,
Confidential Information, and Non Solicitation.

                  Section 5 of the Employment Agreement shall remain in full
force and effect after the Termination Date, provided that the definition of
"Company Activities" in Section 5.1 of the Employment Agreement is hereby
amended to read in its entirety as follows: "any business or service engaged in
by Employer as of the Termination Date." If the Company ceases to engage in a
business or service during the Noncompete Period for any reason (including,
without limitation, the sale or transfer of such business or service), then such
business or service shall no longer be considered a Company Activity. The
restrictions stated in this Agreement and Section 5 of the Employment Agreement
are in addition to and not in lieu of protections afforded to Trade Secrets and
Confidential Information under applicable state law. Nothing in this Agreement
or Section 5 of the Employment Agreement is intended to or shall be interpreted
as diminishing or otherwise limiting the Company's right under applicable state
law to protect its Trade Secrets and Confidential Information. The obligations
of Mellett under this Section 5 and under Section 5 of the Employment Agreement
shall not be assignable, without Mellett's prior written consent.

                           Section 6  General Release by Mellett.

                  (a)      Mellett hereby knowingly and voluntarily releases and
forever discharges the Company and each of its affiliates, predecessors,
successors, parents, subsidiaries, divisions and assigns and their respective
current and former officers, directors, partners, shareholders, representatives,
employees, former employees, attorneys, and agents (collectively referred to as
"Releasees"), collectively, separately, and severally, from any and all state,
federal, or local claims, causes of action, liabilities, and judgments of every
type and description whatsoever at law or in equity (including, but not limited
to, claims arising under the Civil Rights Act of 1964, as amended, the
Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security
Act of 1974, as amended, the Fair Labor Standards Act of 1938, as amended, the
Americans with Disabilities Act, state and local labor and employment laws, and
state tort, contract, or statutory law) that he, his heirs, administrators,
executors, personal representatives, beneficiaries, and assigns have, may have
or may claim to have against the Releasees for compensatory or punitive damages
or other legal or equitable relief of any type or description.


                                      -4-
<PAGE>

                  (b)      Mellett also hereby knowingly and voluntarily
releases and forever discharges the Releasees, collectively, separately, and
severally, from any and all claims, causes of action, and liabilities arising
under the Age Discrimination in Employment Act of 1967, as amended ("ADEA"),
which he, his heirs, administrators, executors, personal representatives,
beneficiaries, and assigns may have or claim to have against the Releasees. The
claims described in paragraphs (a) and (b) of this Section 6 are collectively
referred to as the "Released Claims". Notwithstanding any other provision or
paragraph of this Agreement, Mellett does not hereby waive any rights or claims
under the ADEA that may arise after the date on which he executes this
Agreement.

                  (c)      Mellett understands and agrees that the Released
Claims are intended to and do include any and all claims of every nature and
kind whatsoever (whether known, unknown, suspected, or unsuspected) which he has
or may have against the Releasees, individually or collectively.

                  (d)      Mellett further acknowledges that he may hereafter
discover facts different from or in addition to those which he now knows or
believes to be true with respect to the Released Claims and agrees that, in such
event, this Agreement shall nevertheless be and remain effective in all
respects, notwithstanding such different or additional facts, or the discovery
thereof.

                  (e)      Mellett hereby acknowledges and represents that he
has been given a reasonable period of at least 21 days to consider the terms of
this Agreement; that the Company has advised him in writing to consult with an
attorney prior to executing this Agreement; and that he has received valuable
and good consideration in exchange for his execution of this Agreement.

                  (f)      Mellett and the Company hereby acknowledge that
Mellett may revoke this Agreement within seven days after he has executed the
Agreement. In the event Mellett chooses to exercise his option to revoke this
Agreement, Mellett shall notify the Company in writing, via facsimile, addressed
to the Company's designated agent for this purpose, Debra McCreight, VP Human
Resources, 2 Carlson Parkway, Suite 400, Plymouth, MN 55447, Facsimile No. (763)
745-1902, and return to the Company all monies, if any paid pursuant to this
Agreement, no later than 5:00 p.m. of the last day of the revocation period.

                  (g)      Notwithstanding anything herein to the contrary,
Mellett does not waive or release any rights arising under this Agreement, any
claims which may arise after the date hereof as a result of actions or events
occurring after the date hereof, or any of his rights to be indemnified in
accordance with the Articles of Incorporation and the bylaws of the Company and
applicable law or pursuant to the Company's Directors and Officers Insurance
Policy in his capacity as an officer and director of the Company and its
subsidiaries and affiliates. In addition, the Company agrees to have Mellett
covered under its Directors and Officers Insurance Policies for at least a three
year period following the Termination Date.

                  (h)      The Company hereby acknowledges that, as of the date
hereof, it is unaware of any claim, or any basis for a claim, by the Company or
any of its subsidiaries or affiliates against Mellett.


                                      -5-
<PAGE>

                           Section 7  General Release by the Company.

                  (a)      The Company (on behalf of itself and each of its
successors, parents and subsidiaries) (collectively the "Company Entities")
hereby knowingly and voluntarily releases and forever discharges Mellett from
any and all state, federal, or local claims, causes of action, liabilities, and
judgments of every type and description whatsoever at law or in equity that the
Company Entities have, may have or may claim to have against Mellett for
compensatory or punitive damages or other legal or equitable relief of any type
or description (the "Claims").

                  (b)      The Company understands and agrees that the Claims
are intended to and do include any and all claims of every nature and kind
whatsoever (whether known, unknown, suspected, or unsuspected) which the Company
Entities have or may have against Mellett.

                  (c)      The Company further acknowledges that the Company may
hereafter discover facts different from or in addition to those which the
Company now knows or believes to be true with respect to the Claims and agrees
that, in such event, this Agreement shall nevertheless be and remain effective
in all respects, notwithstanding such different or additional facts, or the
discovery thereof.

                  (d)      Notwithstanding anything herein to the contrary, the
Company Entities do not waive or release any rights arising under this Agreement
or any claims which may arise after the date hereof as a result of actions or
events occurring after the date hereof.

                  (e)      Mellett hereby acknowledges that, as of the date
hereof, he is unaware of any claim, or any basis for a claim, by Mellett against
the Company Entities.

                           Section 8  Miscellaneous.

                  (a)      Tax Withholding. All taxes due on amounts paid to
Mellett under this Agreement shall be the responsibility of Mellett. The Company
shall be entitled to withhold all taxes that it determines it is legally
required to withhold.

                  (b)      Fees. The Company shall reimburse Mellett for the
fees incurred by Mellett in seeking the advice of an attorney and a tax advisor
with respect to this Agreement, up to a total maximum of $5,000.

                  (c)      Future Cooperation. Mellett agrees and covenants that
he shall, to the extent reasonably requested in writing, cooperate with and
assist the Company in any pending or future litigation in which the Company is a
party, and regarding which Mellett, by virtue of his employment with the
Company, has factual knowledge or information relevant to said litigation. The
Company will reimburse Mellett for his reasonable out-of-pocket expenses in
complying with this paragraph.


                                      -6-
<PAGE>

                  (d)      Notices. Any notice or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered in person or by courier, by telecopy transmission or sent by any
express mail service, postage or fees prepaid at the following addresses:

         The Company

                  AHL Services, Inc.
                  2 Carlson Parkway, Suite 400
                  Plymouth, MN 55447
                  Attention:  Debra McCreight, VP Human Resources
                  Telecopy No.: 763-745-1902


         Mellett

                  Mr. Edwin R. Mellett




or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.

                  (e)      Binding Effect. This Agreement shall inure to the
benefit of, and shall be binding upon, the Company and its successors and
assigns, and Mellett and his assigns, executors, administrators, personal
representatives, heirs, and legatees.

                  (f)      Entire Agreement. This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by both of the parties hereto.

                  (g)      Governing Law. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed, and governed by
and in accordance with, the laws of the State of Georgia. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision.

                  (h)      Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Unless otherwise
specified to the contrary, all references to sections and paragraph headings are
references to sections and paragraph headings of this Agreement.


                                      -7-
<PAGE>

                  (i)      Specific Performance. Each party hereto hereby agrees
that any remedy at law for any breach of the provisions contained in this
Agreement shall be inadequate and that the other parties hereto shall be
entitled to specific performance and any other appropriate injunctive relief in
addition to any other remedy such party might have under this Agreement or at
law or in equity.

                  (j)      Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

                  (k)      Understanding. Mellett acknowledges and agrees that
he has read and fully understands the contents and the effect of this Agreement.
Mellett acknowledges and agrees that he has had a reasonable opportunity and
been advised to seek the advice of an attorney as to such content and effect and
that he did so to the extent he deemed appropriate. Mellett accepts each and all
of the terms, provisions, and conditions of this Agreement, and does so
voluntarily and with full knowledge and understanding of the contents, nature,
and effect of this Agreement.


                                      -8-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.


                                             EDWIN R. MELLETT

                                             AHL SERVICES, INC.



                                             By:
                                                -----------------------------
                                             Name:
                                                  ---------------------------
                                             Title:
                                                   --------------------------


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